How experiential retail is changing the way Kiwis shop for alcohol

One New Zealand retailer is transcending the liquor store experience, creating a flagship model that connects with customers in unique and experiential ways. Murray Jervis of Context Architects shares more information.

Since the 1989 Sale of Liquor Act, the number of liquor outlets in New Zealand has more than doubled. The Act, which changed the drinking age from 20 to 18 and permitted the sale of beer and wine in grocery stores, greatly liberalised the sale and supply of liquor and increased competition among retailers.

Today, with so many options – including the grocery store if you’re a beer or wine drinker – and very little being done to distinguish the in-store experience amongst them, most shoppers make purchase decisions around two factors alone: price and proximity. They go wherever is closest, cheapest, or both, which means winning business as a liquor retailer can become an exercise in undercutting yourself.

Liquor King had a different idea, however; to become New Zealand’s most adored liquor retailer by a providing a fun, targeted and informative experience. Delighting customers through deeper design and enticing them to return. Here’s how it works.

The case for experiential retail

Nearly half (40 percent) of consumers don’t know what they’re going to purchase when they walk into a liquor store. Among those who do, 50 percent swap brands and 21 percent change their minds entirely. Unlike more straightforward transactions – such as popping to the shop for a bottle of milk – consumers tend to be more open to persuasion when it comes to what they’ll serve at their next dinner party. With alcohol sales, there’s a clear opportunity for redirecting customers and guiding them towards more valuable or fit-for-purpose purchases. That’s why creative signage, labelling, promotions and point-of-sale advertising are so common in the bottle shop.

Traditional marketing tactics like these aren’t enough however, to establish a clear point-of-difference as a brand. A one-off promotion is unlikely to win return business and again, liquor stores find themselves competing on price. To change the game, smart retailers like Liquor King are moving away from deals and promotions and towards creating unique and valuable customer experiences.

Experiential retail – where shoppers are encouraged to engage with products in some meaningful, original way – solves problems and answers questions. It meets shoppers with the information they need to make a purchase and ideally, spend more.

It’s the treadmill in the shoe store you use to try out the trainers in action, and the virtual reality goggles that let you tour your new home before it’s built. Experiential retail is still novel, but it’s also intuitive, informative, meaningful and personalised when done well. We see a major competitive advantage for bricks-and-mortar establishments; by providing an experience that can’t be had virtually, retailers keep customers shopping in-person, even when products are available online.

Because alcohol buyers are particularly likely to change their mind when shopping, a liquor store is the ideal venue for retail theatre and experiential tactics that could reshape a purchase. With a little retail magic, the customer may buy that bottle of Pinot Noir they came in for, as well as an expensive bottle of gin.

Regardless of the opportunity, the majority of alcohol retailers have been slow to adopt experiential tactics. This will all need to change, however, as ecommerce continues to encroach on the alcohol industry. Over the last decade, the online alcohol market has grown 20 percent year-on-year- a trend that shows no signs of slowing.

How Liquor King is championing experiential retail in NZ

Liquor King decided it was time to break the mould. Uninterested in competitive price wars or excessive advertising, Liquor King formulated a strategy to win long-term business by providing top-notch, innovative experiences that would meet customers in their buyer journey and guide them towards the right purchase.

“Shoppers have changed. They expect frictionless and customised experiences over just picking a product off the shelf. We wanted to ensure we developed a store environment that was not just different but also enjoyable,” explains Fiona Kerr, marketing manager for Lion Liquor Retail.

Together with the Liquor King team, we designed a new retail concept with fun, memorable and targeted zones tailored to real-life customers.Rather than organising the floor by product categories, we designed dedicated experiential zones, based on customer preferences – putting the emphasis firmly on people, not products.

One such zone, The Conservatory is more than just a location for gin, sparkling and white wine. It’s a place where customers can learn how to make a new cocktail or select the right garnish for a drink. Dangling ivy and polished brass tapware complement the fruity and floral flavours sold and sampled here.

The Distillery, on the other hand, is tailored to whiskey lovers and fans of spicy, warm or smoky flavours. Deep leather arm chairs lend themselves to relaxed conversations and there’s a library to read up on the art of serving and drinking such beverages. This is where shoppers can unearth the difference between Scotch, Irish and Single Malt whisky or discover the perfect gift for a friend.

With customised, informative and enjoyable experiences, customers are guided towards a purchase in a memorable and entertaining way. Activities not only encourage shoppers to dwell longer, but also guide them towards a larger, more informed purchase. There’s a strong hosting element to the new concept – customers are looked after and taught how to recreate the experience at home.

With the first concept store we designed, now open and trading in Carlton, Liquor King is well on its way to transcending the liquor store experience in New Zealand. They’re currently trialing the Conservatory and Distillery spaces, soon to be expanded into the Brewbar and Deli, with a provision for a food-truck market and heated outdoor seating area. They’ve conceptualised ten distinct zones to be rolled out at flagship stores across the country.

“The Liquor King flagship model is about putting people first – shifting the focus away from products and onto customers,” explains lead architect Natalie Snowden. “The experience of buying alcohol is often very similar everywhere you go. It tends to be predictable and there’s not much being done to help you along in your customer journey. If you walk in undecided, you’d likely leave just as unsure.

Liquor King has changed all of that by creating a flagship experience that’s focused on shopping behaviours, customer journeys and tactile activities. They’ve set customers up for a fun and informative shopping experience. As they journey throughout the store, there are countless opportunities to engage with products in a meaningful way. It’s a liquor store you’ll want to visit and re-visit regardless of location or price,” concludes Snowden.

We’ll drink to that.

This content was supplied by Context Architects.

This story originally appeared in NZ Retail issue 760 February/March 2019

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